One of the most significant obstacles for small enterprises, particularly those led by entrepreneurs from disadvantaged backgrounds, is the lack of equity-like financing for startups and rapid growth. Small enterprises go through various stages: seeding, cold start, growth, maturity, and decline. Loans are beneficial during the maturity phase, but the other stages desperately require equity-like financing referred to as "micro equity".
As the sole SEBI-registered Alternative Investment Fund focusing on India's grassroots entrepreneurs, we offer financial support that ranges from Rs. 5 lakh to Rs. 25 lakh. Fund I is dedicated to providing equity-like financing to traditional, yet technology-empowered businesses that demonstrate significant potential for rapid expansion.
Our Fund is committed to empowering India's most promising entrepreneurs who also happen to be among the most underserved groups, including women, minorities, and farmers from marginalized communities. These individuals often face significant barriers when starting or growing a business, primarily due to a critical shortage of equity-like financing.
Our Fund strategically invests in business sectors that capitalize on the unique local competitive edges—be it in the realm of regional tastes, cultural practices, lifestyle habits, or societal norms. These carefully selected sectors not only have a rapid capital turnover but also high profit margins, ensuring that investors receive an attractive IRR.
IIT Delhi and IIM Ahmedabad alumnus, "pioneer of livelihood promotion in India", globally renowned social entrepreneur
Founder, VenturEast "longest serving VC firm in India" and the driving forcce behind first micro-equity pilot in 2008-2015
Priyanka, Sanjay Jain, and Sandeep Koujalgi from CIIE (IIM Ahmedabad) incubated micro-equity pilot (2020-2025)
Director, Sahulat Microfinance, the "revolutionary interest-free Islamic microfinance in India" headquartered in Telangana
IIT Varanasi, AIM Philippines, CFA Charterholder (USA), 20 years social entrepreneur, 5 years in villages, 4 startups, 1-5X exits
Fund manager with 13 years of venture capital and entrepreneurial experience in India and Africa
Over 13 years of extensive rural entrepreneurial experience in over 14 states in India, business appraisal expert
Over 13 years of experience, co-founded 100+ sector businesses; many first-time entrepreneurs, over 50% females
Vijay Mahajan, a celebrated figure in the realm of microfinance in India, believes that the mere provision of loans to microfinance customers is not a panacea for the country's employment challenges. He champions the concept of "micro equity"—a form of equity-like financing tailored for small enterprises with a workforce of 10 to 30 people, especially crucial in the startup and rapid growth phases. Embracing this vision, Wee Cee Fund stands as the only Fund in India that offers this specialized financing.
Who utilized micro equity to establish a cooler manufacturing plant, highlights the inadequacy of loans as a suitable product for startups and growth. He emphasizes the absence of a supportive ecosystem for aspiring first-generation entrepreneurs, underscoring the need for alternative financial instruments like micro equity to foster their success and enable their entrepreneurial journeys.
Discusses the challenges of initiating a business with a loan, including the difficulties he faced in meeting fixed repayments during periods of rapid growth. He highlights the lack of control over cash flows and the limited visibility into the business's profits, emphasizing the drawbacks of relying solely on loan financing for entrepreneurial ventures.
Discusses her positive experience with micro equity, highlighting how it has provided a smooth financial journey. She explains that by sharing the remaining profits after deducting business expenses, retained earnings, and personal drawdown, micro equity aligns well with the cash flow volatility of her business.
Zaki highlights the informal nature of s enterprises and the challenges they face due to the absence of institutional mechanisms for partnership finance and limited financial support from friends and family. Recognizing the need of the hour, he sees immense potential in the micro equity product to address these issues effectively.
Entrepreneur Farooq reveals that his network of fellow entrepreneurs is naturally connecting with the product, and positive word-of-mouth publicity is generating increasing interest among entrepreneurs, resulting in a growing queue of individuals eager to benefit from it.
He shares the challenges faced during the COVID-19 pandemic when he struggled to meet the fixed EMI payments to the lender, resulting in the loss of his entire capital. He emphasizes that micro-equity could have been a lifeline for businesses, preventing their closure during such unprecedented times.
Farooq, an entrepreneur, highlights the significant growth of 300-400% in sales following the infusion of micro equity financing. He attributes this success to the micro equity product, which enabled him to establish a cross-selling business and capitalize on the increased footfall.
A major challenge we encounter is the lack of trust in the integrity of micro entrepreneurs, leading to a scarcity of risk capital for their ventures. This stands in stark contrast to the tech sector, where significant investments are made in startups. Bridging this gap requires building trust, recognizing the potential of micro entrepreneurs, and facilitating the flow of risk capital into their businesses. By doing so, we can unlock their growth potential and valuable contributions to the economy.
The second mindset challenge is the lack of trust in the capabilities of aspirational entrepreneurs, especially women. To overcome this, a hybrid model that combines collective and capitalist structures can empower entrepreneurs and maximize the potential of the supply chain. By placing trust in their abilities and giving them control, we can foster innovation, improve market access, and capture value throughout the supply chain. This approach enables collaboration while empowering entrepreneurs to lead and succeed.
Micro enterprises require more than just loans to meet their financing needs, particularly during startup and high-growth stages. Risk capital products are crucial to support these entrepreneurs effectively. It is important to acknowledge that aspiring entrepreneurs are not limited to prestigious colleges but are often found in tier-3, tier-4 towns, and rural areas, where they demonstrate significant growth potential. To cater to their requirements and empower them to succeed, we must expand our perspective and develop risk capital products
Micro entrepreneurs have enthusiastically embraced micro equity as it offers a repayment structure linked to their business profitability, fostering a shared risk partnership with investors. The potential for competitive returns and impressive IRR makes micro equity an attractive asset class. However, its recognition as a mainstream asset class requires the support of government ministries and donor agencies to undergo multiple financing cycles. Donors and the government must navigate the initial challenges and incubation process to pave the way for mainstream private equity investments in micro equity over the next 10-20 years.
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